Job growth, creation on focus

A year ago, when the New Mexico Legislature convened for a 60-day session, the state was dead last in job growth.

A year later, New Mexico is still dead last in job growth.

The state labor force grew less than 1 percent during the most recent three-year period, from Jan. 1, 2011, the day Gov. Susana Martinez assumed office, through Nov, 30, 2013, according to data provided to The New Mexican by Christopher Erickson, an economist at New Mexico State University.

Joining New Mexico in the bottom five for the three-year duration are Alaska, Maine, Alabama and the District of Columbia.

The analysis this year shows there was some job growth during the Martinez administration, as a year ago the state was one of two still showing employment losses.

Both the governor and lawmakers have vowed to put jobs and economic development at the fore of the 30-day legislative session that opened this week — and the first words Gov. Martinez spoke during her State of the State speech were, “Our focus must be on two of the most pressing issues, jobs and education.”

For her administration, that means more job training, recruitment of college researchers and professors, expanding the health care workforce and tax incentives for business startups.

But experts say that might not make a big difference with voters and business leaders, as the governor and many lawmakers face re-election in coming months.

“They’re still very concerned and they’re scared. They’re really not feeling that comeback,” said Beverlee J. McClure, president of the Association of Commerce and Industry, who served alongside lawmakers on an interim committee called the Jobs Council to develop an economic development strategy for New Mexico. “But we saw the states that are adding jobs, the states that are coming back from the recession, have a plan and that plan is statewide and is regionalized so every region has a piece of that. It’s a very, very important first step.”

“New Mexico is the most reliant state in the nation on the federal government,” Martinez spokesman Enrique Knell said Wednesday, “and the dysfunction in Washington hits New Mexico in a disproportionate way, affecting revenues and causing employment growth in certain parts of the private sector to be offset by government job losses. “

As for lawmakers, House Speaker Kenny Martinez of Grants, Senate President Pro Tem Mary Kay Papen of Las Cruces and others spoke Wednesday about a decades-long approach for job growth. After meeting during the interim as the Jobs Council, lawmakers as well as business and industry leaders said they have initiatives that will add 160,000 jobs in New Mexico over the next 10 years, a sevenfold increase over today’s pace.

The council came up with the number as part of an estimate of what it will take to gain full employment in the state — based on population growth, future job losses and worker migration. “This is a very strategic architecture of job creation,” House Speaker Martinez said Wednesday.

But don’t expect a quick fix.

“New Mexico’s slow growth is attributable to federal sequestering,” economics professor Erickson in an email last week. “Federal spending accounts for a higher share of income in New Mexico than in any other state. Of course, many have argued for reduced dependence on federal spending as important to development in New Mexico, but how to get there from here is not obvious. Certainly, there are no quick fixes.”

Likewise, Mark Lautman an economic development consultant hired by the Legislature, said Wednesday that agreeing on a plan and sticking with it is more important than throwing money at things that might not work.

“When you start speaking about rankings, where we can be, that’s pretty tough because you don’t know what everybody else is going to do,” Lautman said. “This isn’t a spigot you turn on and off. Job creation is a lot harder now than it was six or seven years ago.”

What the governor and the Legislature did last session — business tax cuts and reform, tourism promotion and job training — will improve the employment numbers, but “you can’t just drop all the money and all the resources in one session and expect everything to turn around the next year,” he said. “It takes two or three years to get rolling, and it’s really a dog-year’s game — it takes about seven years for things to really move the needle.”

Speaker Martinez and Papen say the work of the Jobs Council will be extended another year. For this session, however, it is requesting money for the following:

• $10 million for a discretionary closing fund to draw projects pursuant to the Local Economic Development Act.

• $2 million for a Cooperative Marketing program, which will allow participants in the certified cities program to hire additional people to help regions focus economic growth in targeted fields.

• $1.5 million for New Mexico Partnership to expand for outreach and marketing.

• $1.5 million for the Job Training Incentive Program to make it permanent.

• $250,000 to develop and test a job-creation program focused on solo workers who work on contract for firms around the United States.

• $200,000 for certified business incubators.

• $100,000 to fund and support regional efforts to pilot a program for forest restoration and biomass development on U.S. Forest Service land.

• $2.5 million to expand marketing and develop visitor-experience activities for the Department of Tourism.

• $500,00 for online customer service training in the hospitality and tourism fields.

• $150,000 for the Higher Education Department to develop a workforce gap-forecasting model that will identify the number of jobs that will be needed in the future, and the skills, knowledge and experience that those jobs will require.

The Jobs Council also is pushing an expanded summer youth employment program that would include mentoring; a grant program that can help local groups with their recruiting efforts; and a pilot project that would fund physics education in middle schools.

Kenny Martinez said the outline of the Jobs Council is to target specific industries in specific regions and then track results. So every dollar spent by the Legislature for economic development should be tied to job growth in the targeted sectors — manufacturing, digital media, tourism, health and social services, emerging technologies, health, export services, solo independent workers, and agriculture are among the projected growth sectors.

Some of the proposals are already in the governor’s budget and Knell, the governor’s spokesman, said “there’s plenty of room for common ground,” especially with increasing money for tourism, job training and finding a way to close the deal for businesses who want to come to New Mexico.

“The Jobs Council has also talked about the importance of a strong closing fund in New Mexico — one that will allow us to compete with other states to attract companies and jobs to the state. Unfortunately, the LFC’s budget underfunds this economic development tool,” Knell said. “We only received $3.3 million last year, and the LFC is only proposing $4 million for the coming year. This sort of underfunding does not help us compete for jobs.”

In her Tuesday speech, the governor also touted a new report from Ernst & Young that shows the business tax cuts and reforms from last session are starting to get noticed.

She said New Mexico now has the best manufacturing tax structure in the West and has enacted “the most significant tax reform in a generation” that is “sending the loudest message yet that New Mexico is striving to become a business-friendly state.”

Terry Brunner, state director of rural development for the U.S. Department of Agriculture, who serves on the Jobs Council, also said Wednesday that New Mexico needs to be smarter with the way it interacts with the federal government and show it has defined economic targets and priorities.

“What other states are doing is readjusting to the new federal climate,” he said. Don’t just “sit back and take the cuts, but be aggressive and thoughtful in how to work with the feds these days.” Brunner added that 160,000 jobs “is a huge lift for this state. However, if you have clear targets and a strategy behind it, you can get it done.”